Australian Market

Australia’s S&P/ASX 200 edged 0.1% higher, with the benchmark index feeling the drag of energy stock weakness amid tumbling oil prices.

US Market 

U.S. stocks fell, as strong labor-market data bolstered the case for the Federal Reserve to remain tough. The S&P 500 dropped almost 1.2%. The Dow Jones Industrial Average declined 1%. The Nasdaq Composite gave back 1.5%. Both inflation and economic growth have shown signs of slowing, lifting hopes that the Fed and other central banks could soon moderate or end their programs of lifting interest rates. Some investors, however, worry that inflation won’t be returning to the Fed’s target of 2% soon.  

“Inflation has clearly rolled over. I don’t think, however, it’s on its way to 2% anytime soon,” said Nancy Tengler, chief executive at Laffer Tengler Investments. Ms. Tengler said companies could keep prices for finished products higher for better margins despite lower prices for raw materials. Still, investors are hopeful that the Fed will pivot to pausing rates, which could ultimately boost equities. “Unless there is a shock from left field, we should see growth continue to be soft, inflation should decline and at some point, central banks are going to stop raising interest rates,” said Charles Diebel, head of fixed income at Mediolanum International Funds. “This year is all about when, not if.”

Commodities

Gold futures finished lower, posting their first loss in five sessions, as traders booked profits in the wake of the metal’s rise to its highest price since June. Gold futures for February delivery fell 1% to settle at $1,840.60 per ounce on Comex. “Gold prices have retraced from their recent highs for two reasons. Firstly, it is the strength of the dollar index which is pushing the price of the shining metal lower. Secondly, after the massive run in prices, it is absolutely normal for traders to book some profit off the table,” said Naeem Aslam, chief market analyst at AvaTrade.

Oil Futures

Oil futures finished higher after suffering a two-day fall on fears of a global economic slowdown and surging Covid cases in China. Prices found support from news of a pipeline outage, as well as weekly U.S. inventories data. West Texas Intermediate crude for February delivery rose 1.1% to settle at $73.67 a barrel on the New York Mercantile Exchange.

March Brent crude climbed 1.1% to settle at $78.69 a barrel on ICE Futures Europe. “Energy has seen a severe selloff recently and we would be surprised if further weakness does occur,” said Tariq Zahir, managing member at Tyche Capital Advisors. “Charts on crude oil look bearish. However, we feel the risk is to the upside from here.”

Forex

No news.

European Markets

No news.

Asian Markets

Earlier Thursday, Chinese shares ended higher on hopes for a strong economic recovery in 2023 after the country emerges from the pandemic. Most sectors rallied with liquor producers and auto makers leading the gainers. The Shanghai Composite Index ended 1.0% higher, the Shenzhen Composite Index rose 1.6% and the ChiNext Price Index added 2.8%.

Hong Kong’s Hang Seng Index gained 1.2% as the market kept up its bullish start into 2023. Consumer goods and services companies continued their recent reopening-driven rally. The Nikkei Stock Average advanced 0.4% as gains in electronics and tech shares helped offset losses in financial stocks.